Form 7207

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Instructions for Form 7207

Department of the Treasury
Internal Revenue Service

(January 2023)

Advanced Manufacturing Production Credit
Section references are to the Internal Revenue Code unless
otherwise noted.

assembly which is suitable to generate electricity when exposed
to sunlight, and ready for installation without an additional
manufacturing process.
• Solar tracker means a mechanical system that moves solar
modules according to the position of the sun and to increase
energy output.
• Torque tube means a structural steel support element
(including longitudinal purlins) which is part of a solar tracker, is
of any cross-sectional shape, may be assembled from
individually manufactured segments, spans longitudinally
between foundation posts, supports solar panels and is
connected to a mounting attachment for solar panels (with or
without separate module interface rails), and is rotated by means
of a drive system.
• Structural fastener means a component which is used to
connect the mechanical and drive system components of a solar
tracker to the foundation of such solar tracker, to connect torque
tubes to drive assemblies, or to connect segments of torque
tubes to one another.

DRAFT AS OF
January 20, 2023

Future Developments

For the latest information about developments related to Form
7207 and its instructions, such as legislation enacted after they
were published, go to IRS.gov/Form7207.

What’s New

The Inflation Reduction Act of 2022 created new section 45X,
Advanced Manufacturing Production Credit. New Form 7207 is
used to claim this credit for eligible components produced and
sold after 2022.

General Instructions
Purpose of Form

Form 7207 is used to claim the advanced manufacturing credit
under section 45X for eligible components produced by the
taxpayer and sold during the tax year in the taxpayer’s trade or
business to an unrelated person.

Additional Information

For more information, see section 45X and Notice 2022-47.

Credit Amount

Generally, the credit for advanced manufacturing production is
determined for each specific type of eligible component (see
Definitions, later).

Definitions
Eligible component. Eligible components are any solar energy
components, wind energy components, inverters, qualifying
battery components, and applicable critical minerals.
An eligible component does not include any property
that is produced at a facility, the basis of any part of
CAUTION which is considered for purposes of the qualifying
advanced energy project credit of section 48C, as amended by
Public Law 117-167.

!

Solar energy components are any of the following.
• Photovoltaic cell is the smallest semiconductor element of a
solar module which performs the immediate conversion of light
into electricity.
• Photovoltaic wafer is a thin slice, sheet, or layer of
semiconductor material of at least 240 square centimeters
produced by a single manufacturer either directly from molten or
evaporated solar grade polysilicon or deposition of solar grade
thin film semiconductor photon absorber layer, or through
formation of an ingot from molten polysilicon and subsequent
slicing, and which comprises the substrate or absorber layer of
one or more photovoltaic cells.
• Polymeric backsheet is a sheet on the back of a solar
module which acts as an electric insulator and protects the inner
components of such module from the surrounding environment.
• Solar grade polysilicon is a silicon which is suitable for use
in photovoltaic manufacturing, and purified to a minimum purity
of 99.999999% silicon by mass.
• Solar module is the connection and lamination of
photovoltaic cells into an environmentally protected final
Jan 20, 2023

Wind energy components are any of the following.
• Blade means an airfoil-shaped blade which is responsible for
converting wind energy to low-speed rotational energy.
• Offshore wind foundation is the component (including
transition piece) which secures an offshore wind tower and any
above-water turbine components to the seafloor using fixed
platforms such as offshore wind monopiles, jackets, or
gravity-based foundations, or floating platforms and associated
mooring systems.
• Nacelle is the assembly of the drivetrain and other tower-top
components of a wind turbine (with the exception of the blades
and the hub) within their cover housing.
• Related offshore wind vessel is any vessel which is
purpose-built or retrofitted for purposes of the development,
transport, installation, operation, or maintenance of offshore
wind energy components.
• Tower is a tubular or lattice structure which supports the
nacelle and rotor of a wind turbine.
Inverters.
• Inverter means an end product which is suitable to convert
direct current electricity from one or more solar modules or
certified distributed wind energy systems into alternating current
electricity.
• Central inverter means an inverter which is suitable for large
utility-scale systems and has a capacity which is greater than
1,000 kilowatts (expressed on a per alternating current watt
basis).
• Commercial inverter means an inverter which is suitable for
commercial or utility-scale applications, has a rated output of
208, 480, 600, or 800 volt three-phase power, and has a
capacity which is not less than 20 kilowatts and not greater than
125 kilowatts (expressed on a per alternating current watt basis).
• Distributed wind inverter means an inverter which is used
in a residential or non-residential system which utilizes one or
more certified distributed wind energy systems, and has a rated
output of not greater than 150 kilowatts. A “certified distributed
wind energy system” is certified by an accredited certification
agency to meet standard 9.1-2009 of the American Wind Energy
Association (including any subsequent revisions to or
modifications of such standard which have been approved by
the American National Standards Institute).

Cat. No. 93469V

• Graphite which is purified to a minimum purity of 99.9%
graphitic carbon by mass.
• Indium (1) which is converted to (a) indium tin oxide, or (b)
indium oxide which is purified to a minimum purity of 99.9%
indium oxide by mass, or (2) which is purified to a minimum
purity of 99% indium by mass.
• Lithium which is converted to lithium carbonate or lithium
hydroxide, or purified to a minimum purity of 99.9% lithium by
mass.
• Manganese which is converted to manganese sulphate, or
purified to a minimum purity of 99.7% manganese by mass.
• Neodymium which is converted to
neodymium-praseodymium oxide which is purified to a minimum
purity of 99% neodymium-praseodymium oxide by mass,
converted to neodymium oxide which is purified to a minimum
purity of 99.5% neodymium oxide by mass, or purified to a
minimum purity of 99.9% neodymium by mass.
• Nickel which is converted to nickel sulphate, or purified to a
minimum purity of 99% nickel by mass.
• Niobium which is converted to ferronibium, or purified to a
minimum purity of 99% niobium by mass.
• Tellurium which is converted to cadmium telluride, or purified
to a minimum purity of 99% tellurium by mass.
• Tin which is purified to low alpha emitting tin which has a
purity of greater than 99.99% by mass, and possesses an alpha
emission rate of not greater than 0.01 counts per hour per
centimeter square.
• Tungsten which is converted to ammonium paratungstate or
ferrotungsten.
• Vanadium which is converted to ferrovanadium or vanadium
pentoxide.
• Yttrium which is converted to yttrium oxide which is purified
to a minimum purity of 99.999% yttrium oxide by mass, or
purified to a minimum purity of 99.9% yttrium by mass.

• Microinverter means an inverter which is suitable to connect
with one solar module, has a rated output of 120 or 240 volt
single-phase power, or 208 or 480 volt three-phase power, and
has a capacity which is not greater than 650 watts (expressed on
a per alternating current watt basis).
• Residential inverter means an inverter which is suitable for a
residence, has a rated output of 120 or 240 volt single-phase
power, and has a capacity which is not greater than 20 kilowatts
(expressed on a per alternating current watt basis).
• Utility inverter means an inverter which is suitable for
commercial or utility-scale systems, has a rated output of not
less than 600 volt three-phase power, and has a capacity
greater than 125 kilowatts and not greater than 1,000 kilowatts
(expressed on a per alternating current watt basis).

DRAFT AS OF
January 20, 2023

Qualifying battery components are any of the following.
• Electrode active material means cathode materials, anode
materials, anode foils, and electrochemically active materials
including solvents, additives, and electrolyte salts that contribute
to the electrochemical processes necessary for energy storage.
• Battery cell means an electrochemical cell comprised of one
or more positive electrodes and one or more negative
electrodes, with an energy density of not less than 100
watt-hours per liter, and capable of storing at least 12 watt-hours
of energy.
• Battery module means a module (a) in the case of a module
using battery cells, with two or more battery cells which are
configured electrically, in series or parallel, to create voltage or
current, as appropriate, to a specified end use; or (b) with no
battery cells. To be eligible, either type of battery module must
have an aggregate capacity of not less than 7 kilowatt-hours (or,
in the case of a module for a hydrogen fuel cell vehicle, not less
than 1 kilowatt-hour).

Applicable critical minerals are any of the following.
• Aluminum which is converted from bauxite to a minimum
purity of 99% alumina by mass, or purified to a minimum purity of
99.9% aluminum by mass.
• Antimony which is converted to antimony trisulfide
concentrate with a minimum purity of 90% antimony trisulfide by
mass, or purified to a minimum purity of 99.65% antimony by
mass.
• Barite which is barium sulfate purified to a minimum purity of
80% barite by mass.
• Beryllium which is converted to copper-beryllium master
alloy, or purified to a minimum purity of 99% beryllium by mass.
• Cerium which is converted to cerium oxide which is purified
to a minimum purity of 99.9% cerium oxide by mass, or purified
to a minimum purity of 99% cerium by mass.
• Cesium which is converted to cesium formate or cesium
carbonate, or purified to a minimum purity of 99% cesium by
mass.
• Chromium which is converted to ferrochromium consisting of
not less than 60% chromium by mass, or purified to a minimum
purity of 99% chromium by mass.
• Cobalt which is converted to cobalt sulfate, or purified to a
minimum purity of 99.6% cobalt by mass.
• Dysprosium which is converted to not less than 99% pure
dysprosium iron alloy by mass, or purified to a minimum purity of
99% dysprosium by mass.
• Europium which is converted to europium oxide which is
purified to a minimum purity of 99.9% europium oxide by mass,
or purified to a minimum purity of 99% by mass.
• Fluorspar which is converted to fluorspar which is purified to
a minimum purity of 97% calcium fluoride by mass, or purified to
a minimum purity of 99% fluorspar by mass.
• Gadolinium which is converted to gadolinium oxide which is
purified to a minimum purity of 99.9% gadolinium oxide by mass,
or purified to a minimum purity of 99% gadolinium by mass.
• Germanium which is converted to germanium tetrachloride,
or purified to a minimum purity of 99.99% germanium by mass.

Other Minerals
Any of the following minerals, provided that such mineral is purified to
a minimum purity of 99% by mass:
Arsenic

Lanthanum

Rubidium

Titanium

Bismuth

Lutetium

Ruthenium

Ytterbium

Erbium

Magnesium

Samarium

Zinc

Gallium

Palladium

Scandium

Zirconium

Hafnium

Platinum

Tantalum

Holmium

Praseodymium

Terbium

Iridium

Rhodium

Thulium

Special Rules

For purpose of the advanced manufacturing production credit,
section 45X(d)(1) provides that persons are treated as related to
each other if such persons would be treated as a single
employer under the regulations prescribed under the common
control rules of section 52(b).
Sales of eligible components are considered under section
45X only with respect to eligible components, the production of
which is within the United States or U.S. territories, including
continental shelf areas described in sections 638(1) and 638(2).
A person is treated as having sold an eligible component to
an unrelated person if such component is integrated,
incorporated, or assembled into another eligible component
which is sold to an unrelated person.

Phase out. The credit for advanced manufacturing production
will phase out for eligible components sold after 2029, except
applicable critical minerals. For phase-out years, the credit
amount is equal to the product of the amount determined in lines
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Instructions for Form 7207 (January 2023)

• Schedule K-1 (Form 1120-S), Shareholder’s Share of Income,
Deductions, Credits, etc., box 13 (code P).
• Schedule K-1 (Form 1041), Beneficiary’s Share of Income,
Deductions, Credits, etc., box 13 (code Z).
Estates and trusts, go to line 9b. All others, stop here and
report this amount on Form 3800, Part III, line 1b.

1 through 7 of Form 7207 multiplied by the following phase-out
percentages.
Tax year sold

Phase-out percentages

Sold during calendar year 2030

75%

Sold during calendar year 2031

50%

Sold during calendar year 2032

25%

Line 9b. Allocate the credit on line 9a, column (e), between the
estate or trust and the beneficiaries in the same proportion as
income was allocated and enter the beneficiaries’ share on
line 9b, column (e). If the estate or trust is subject to the passive
activity rules, complete Form 8582-CR, Passive Activity Credit
Limitations, to determine the allowed credit that must be
allocated between the estate or trust and the beneficiaries.

DRAFT AS OF
January 20, 2023

Sold after December 31, 2032

0%

Specific Instructions

Figure the advanced manufacturing production credit from your
trade or business on lines 1 through 9. Skip lines 1 through 7 if
you are claiming a credit that was allocated to you from an S
corporation, partnership, estate, or trust.

Paperwork Reduction Act Notice. We ask for the information
on this form to carry out the Internal Revenue laws of the United
States. You are required to give us the information. We need it to
ensure that you are complying with these laws and to allow us to
figure and collect the right amount of tax.

Line 1, column (d). Enter on lines 1a through 1e, in column (d),
the number of solar energy component units produced and sold.
Line 2, column (d). Enter on line 2a, in column (d), the sales
price for any eligible offshore wind vessel produced and sold.
Enter in column (d), on lines 2b through 2f, the number of wind
energy component units produced and sold.

You are not required to provide the information requested on
a form that is subject to the Paperwork Reduction Act unless the
form displays a valid OMB control number. Books or records
relating to a form or its instructions must be retained as long as
their contents may become material in the administration of any
Internal Revenue law. Generally, tax returns and return
information are confidential, as required by section 6103.

Line 3, column (d). Enter on lines 3a and 3b, in column (d), the
number of torque tube and structural fastener component units
produced and sold.
Line 4, column (d). Enter on lines 4a through 4e, in column (d),
the number of inverter component units produced and sold.

The time needed to complete and file this form will vary
depending on individual circumstances. The estimated burden
for individual and business taxpayers filing this form is approved
under OMB control number 1545-XXXX and 1545-XXXX and is
included in the estimates shown in the instructions for their
individual and business income tax return. The estimated burden
for all other taxpayers who file this form is shown below.

Line 5, column (d). Enter on line 5a, in column (d), the costs
incurred for electrode active materials produced and sold.
Line 6, column (d). Enter on lines 6a through 6c, in column (d),
the number of battery component units produced and sold.
Line 7, column (d). Enter on line 7a, in column (d), the costs
incurred for critical minerals.

Recordkeeping . . . . . . . . . . . . . . . .
Learning about the law or the form . . . .
Preparing and sending the form to the IRS

Line 8. Enter on line 8, in column (e), the amount of the
advanced manufacturing production credit from other entities
(partnerships, S corporations, estates, and trusts).
Line 9a. Enter on line 9a, in column (e), the sum of lines 1
through 8, column (e). Partnerships and S corporations, stop
here and report this amount on Schedule K and Schedules K-1,
as follows.
• Schedule K-1 (Form 1065), Partner’s Share of Income,
Deductions, Credits, etc., box 15 (code P).

Instructions for Form 7207 (January 2023)

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2 hr., 52 min.
0 hr., 50 min.
0 hr., 34 min.

If you have comments concerning the accuracy of these time
estimates or suggestions for making this form simpler, we would
be happy to hear from you. See the instructions for the tax return
with which this form is filed.

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